Innovation Asset Blog

Expert investigates lagging federal tech transfer ROI

The U.S. federal government invests approximately $147 billion in research and development each year, with nearly $90 billion allocated to institutions of higher learning. But according to Darrell West, director of governance studies for the Brookings Institute, this funding generates only a "very small" return on investment when weighed in terms of patent licensing fees.

Citing statistics from the latest University Technology Managers Licensing Activity Survey, West noted that federally-funded university research generated approximately $2.5 billion from nearly 3,300 awarded patents. While that is no small sum, it is a rather low yield for a $90 billion investment.

"Part of the problem is that the focus on patents, licenses and startups places too much emphasis on outputs as opposed to outcomes," West wrote in his analysis. "Those indicators represent proxy measures of getting material to the market, as opposed to whether particular research ideas actually are having an impact and being successful in the marketplace."

West suggested that the initial remedy should be establishing more rigorous and detailed financial reporting procedures among federally-funded universities. If held to strict "money in, money out" metrics more comparable to private sector operations, awareness for revenue deficits would likely increase among administrators and their financial backers.

In addition to increasing accountability, West believes that schools have a parallel responsibility to incentivize and foster campus innovation through everything from higher salaries for chief technology officers to stronger faculty mentoring from academic, legal and field experts.